The Law on Investment No. 143/2025/QH15 (the “2025 Investment Law”) was passed by the XV National Assembly at its 10th session and takes effect from 1 March 2026 (save that the provisions on the List of conditional business investment lines take effect from 1 July 2026). The thrust of the reform is to shift the regulatory approach from “pre-inspection” (ex ante control) to “post-inspection” (ex post control). In that spirit, Article 19.2 permits a foreign investor to establish an economic organization before carrying out the procedures for issuance or adjustment of an Investment Registration Certificate (IRC), thereby reversing the “project first – enterprise later” sequence maintained for many years under the 2020 Investment Law. The “project first – enterprise later” sequence ensured that the State authorities controlled business lines and market access conditions at the very stage of ex ante control; however, it also prolonged the preparation period, reduced the investor’s initiative and created apprehension over administrative procedures.

Content of Article 19.2 of the 2025 Investment Law

Article 19.2 of the 2025 Investment Law provides: “A foreign investor may establish an economic organization to implement an investment project before carrying out the procedures for issuance or adjustment of the Investment Registration Certificate, and must satisfy the market access conditions applicable to foreign investors prescribed in Article 8 of this Law when carrying out the procedures for the establishment of the economic organization.”

Article 72 of Decree No. 96/2026/ND-CP elaborates on Article 19.2, allowing a foreign investor to choose one of two methods to establish an economic organization to implement an investment project:

• Method 1 – ERC first, IRC later;
• Method 2 – IRC first, ERC later.

Where Method 1 is selected, the investor must comply with a series of important constraints under Article 72 of Decree No. 96/2026/ND-CP:

• 12-month time limit: the investor is responsible for completing the procedures to obtain the IRC for implementation of the project, consistent with the business lines of the economic organization already established, within 12 months from the date of establishment.
• The project may only be implemented after the IRC is obtained: the economic organization may implement the investment project only after completing the IRC issuance procedures. Prior to that point, the enterprise may only carry out preparatory activities such as leasing premises, recruiting employees and procuring equipment.
• Addition of other business lines only after the IRC: the foreign investor may amend the enterprise registration particulars to add other business investment lines only after the IRC has been issued.
• Charter capital and investment capital: the charter capital of the economic organization established by the foreign investor need not equal the investment capital of the project; the contribution of capital and the mobilization of other funding sources shall be carried out in accordance with the schedule recorded in the IRC.
• Risk borne by the investor: the failure to obtain the IRC, or the issuance of an IRC not meeting expectations after the economic organization has been established, does not fall within the scope of the Government’s guarantees; all risks arising from the preparation and implementation of the project before issuance of the IRC shall be borne by the investor.

Article 8 of the 2025 Investment Law preserves the principle that a foreign investor is subject to the same market access conditions as a domestic investor, save for the business lines on the List of business lines with restricted market access. This List (Appendix I to Decree No. 96/2026/ND-CP) comprises two groups: business lines not yet open to market access, and business lines subject to conditional market access. The market access conditions include: the ratio of charter capital ownership held by foreign investors, the form of investment, the scope of operations, the capacity of the investor and its partner (if any), together with other conditions prescribed by specialized laws and international treaties.

Under Method 1, because the business registration authority has no function to appraise the IRC, satisfaction of the market access conditions is operated through the investor’s undertaking. Article 72.3 of Decree No. 96/2026/ND-CP and Official Letter No. 5427/BTC-DNTN likewise provide that, where an economic organization is established before the issuance or adjustment of the IRC, the request for enterprise registration must include an undertaking to satisfy the market access conditions, and the enterprise registration dossier in such a case does not include a copy of the IRC. In other words, the enterprise is established on the basis of the undertaking, and the investor bears responsibility for the accuracy of that undertaking. This mechanism shifts the burden of proof and legal liability onto the investor and, at the same time, moves the focus of State control to the ex post inspection stage.

Decree No. 296/2026/ND-CP (effective from 23 July 2026) adds Clause 6 to Article 24 of Decree No. 168/2025/ND-CP, providing that, where a foreign investor establishes an enterprise before carrying out the procedures for issuance or adjustment of the IRC, the enterprise registration dossier does not include a copy of the IRC, and the request for enterprise registration must contain an undertaking to satisfy the market access conditions. Accordingly, the legal basis of the undertaking mechanism no longer rests solely on a guiding official letter but is now recorded concurrently in two decrees: Decree No. 96/2026/ND-CP (on investment) and the amended Decree No. 168/2025/ND-CP (on enterprise registration).

Practical application and legal gaps

Legal gap in the uniform implementation of the “ERC first – IRC later” mechanism across localities

Although Article 19.2 of the 2025 Investment Law and Article 72 of Decree No. 96/2026/ND-CP have taken effect, in practice many business registration authorities-and the enterprises themselves-still tend to act cautiously and to process dossiers under the traditional “project first – enterprise later” sequence (Method 2). The “ERC first – IRC later” mechanism has not been applied uniformly nationwide during the initial period of implementation.

The cause of this situation stems from the very gaps in the legal framework: (i) there is as yet no set of criteria enabling the receiving authority to appraise the content of the market access undertaking when issuing the ERC for business lines that remain unclear; (ii) there is as yet no guidance on the reporting regime or on how to manage the enterprise during the period before it holds an IRC; and (iii) the operational systems, forms and registration software are not yet fully synchronized with the new process.

In the face of that situation, on 29 April 2026 the Ministry of Finance issued Official Letter No. 5427/BTC-DNTN providing uniform guidance on the order and procedures for applying the “ERC first – IRC later” mechanism. The Official Letter specifies the required dossier and procedures; it also affirms that the 2025 Investment Law and Decree No. 96/2026/ND-CP do not assign the business registration authority to appraise the content of the undertaking at the time of establishment, and it delineates the responsibility for receiving and processing dossiers as between the provincial-level and commune-level business registration authorities. The need to issue an operational guiding official letter only a few weeks after the provisions took effect shows that the gap between the legal provisions and actual implementation capacity remains considerable. In terms of legal value, an official letter is an ordinary administrative document that does not belong to the system of legal normative documents under the Law on Promulgation of Legal Normative Documents; in principle, therefore, it does not lay down new legal norms, and its binding force and stability are more limited than direct regulation in a decree.

By 23 July 2026, Decree No. 296/2026/ND-CP had elevated the legal basis of the undertaking mechanism from the level of an official letter to the level of a decree. Article 7 of Decree No. 296 adds Clause 6 to Article 24 of Decree No. 168/2025/ND-CP, recording that, where a foreign investor establishes an enterprise before issuance or adjustment of the IRC, the enterprise registration dossier does not include a copy of the IRC and the request for enterprise registration must be accompanied by an undertaking to satisfy the market access conditions; Article 1 of Decree No. 296 adds Clause 7 to Article 4 of Decree No. 168/2025/ND-CP, allowing the provincial-level business registration authority to draw on information from national databases and dispensing with any requirement for the investor to submit a copy of the Investment Registration Certificate or the written approval of the foreign investor’s capital contribution, purchase of shares or purchase of a capital contribution. Nevertheless, Decree No. 296 principally regulates the order and procedures for enterprise registration; the substantive gaps remain unaddressed.

Legal gap in appraising the undertaking to satisfy the market access conditions

Under Method 1, the enterprise is issued the ERC on the basis of an undertaking to satisfy the market access conditions, without any appraisal of the IRC.

Article 8 of the 2025 Investment Law lays down the principle for applying market access conditions, but in practice inconsistent interpretations remain. A typical difficulty arises with business lines that simultaneously display three features:

• they are not on the list of prohibited or restricted market access;
• they are not specifically regulated by specialized law; and
• they are not covered by any market-opening commitment in an international treaty.

For this group, Decree No. 96/2026/ND-CP lays down the principle that, if Vietnamese law imposes no restriction, the foreign investor may have access on the same terms as a domestic investor; if Vietnamese law already provides a restriction, that provision applies.

However, as regards procedure, at the time of establishment registration, the manner of recording the business lines for the above group has not been specifically, clearly and uniformly regulated. Under Article 7 of Decree No. 168/2025/ND-CP, the enterprise must select a level-four economic activity in the Vietnam Standard Industrial Classification (VSIC) to record in the dossier; a market access business line must be recorded in detail so as to be consistent with the selected level-four activity; and it must be recorded in accordance with the WTO Schedule of Commitments, the free trade agreements, or specialized law. This function ordinarily falls within the competence of the specialized authority, namely the investment division. Under Method 1, because there is as yet no IRC recording the project objectives by CPC code, the ERC-issuing authority has neither the basis nor the professional expertise to review and cross-check. This leads to uneven requirements for the registered business lines-some localities grant a fairly broad scope of business lines, while others require the addition of narrowly detailed business lines.

If the content recorded in the ERC is broader than the scope the investor is actually permitted to access (or broader than the scope of the IRC subsequently issued), a conflict will arise upon ex post inspection; conversely, if it is recorded too narrowly, the enterprise may have to amend its registration, whereas the addition of other business investment lines may only be carried out after the IRC is obtained, pursuant to Article 72.4 of Decree No. 96/2026/ND-CP. Uniform guidance is therefore needed on the principles for recording and detailing business lines for the “not-yet-committed” group, together with a mechanism for cross-checking VSIC codes against CPC codes at the very stage of ERC issuance.

These issues call for a standardized set of criteria and undertaking form clearly prescribing the minimum content of the market access undertaking, the supporting documents to be attached and the treatment of not-yet-committed business lines; for the development and publication, on the National Investment Information Portal, of a list of market access conditions by business line for both investors and receiving authorities to consult; and, at the same time, for clear provisions on the legal consequences (adjustment of the scope of operations, suspension, termination) where the undertaking is not performed or the IRC is not issued.

Legal gap in reporting during the transitional period and in determining the consequences of the 12-month time limit

The 2025 Investment Law maintains and reinforces the reporting regime. A foreign-invested enterprise must carry out periodic investment monitoring and evaluation reporting under Decree No. 96/2026/ND-CP and Circular No. 44/2026/TT-BTC. The entire investment reporting system described above is designed to be tied to the investment project-that is, tied to the IRC (project code, implementation progress, disbursed investment capital, implementation status, and so forth). Under Method 1, by contrast, there exists a period in which “the enterprise already exists but the project does not yet exist,” lasting up to 12 months. During this period, under what form must the investor report, and to which authority must the report be submitted, when there is as yet no project code and no IRC to serve as a basis? The lack of guidance for the transitional period creates a risk that the enterprise may be regarded as “failing to comply with the reporting regime,” even though in fact there is as yet no basis for reporting under the existing forms; on the other hand, the administrative authority lacks the data to monitor the enterprise during this “blank” period, thereby undermining the very effectiveness of the ex post inspection that the reform seeks to achieve.

In addition, Article 72.4 of Decree No. 96/2026/ND-CP fixes a 12-month time limit for completing the IRC issuance procedures, but does not clarify the consequences if the time limit expires while the enterprise has still not obtained the IRC. Does the enterprise continue to exist lawfully? May it be granted an extension? If it is compelled to terminate, does the ordinary dissolution mechanism apply, or a special mechanism? And how are its obligations toward employees, creditors and the tax authority to be handled?

Legal gap in delineating “preparatory activities”

The economic organization may implement the project only after obtaining the IRC, but the boundary between permitted preparatory activities (leasing premises, recruitment, procurement) and conduct that amounts to implementation of the project has not been clearly quantified, which readily leads to unintended violations upon ex post inspection. This also gives rise to a sunk-cost risk: project preparation costs incurred before the IRC is obtained may be unrecoverable if the IRC is not issued, or is issued with a narrower scope; and this risk does not fall within the scope of the State’s investment guarantees.

Where the law confers the right to choose a method but lacks criteria and transitional guidance, each locality may develop its own approach, reducing the predictability of the investment environment and harbouring the potential for unhealthy competition in attracting FDI.

The tightened ex post inspection context that makes the above gaps significant

As input requirements are relaxed, the focus of control shifts to the subsequent stage. In practice, the provincial Departments of Finance and the specialized authorities are conducting ex post inspection ever more stringently: requiring strict compliance with the periodic reporting regime, and organizing inspections and examinations by administrative territory in order to review compliance with the IRC, the investment policy approval, the business investment conditions, the project progress and the performance of undertakings. A foreign-invested enterprise is also subject to mandatory annual audit of its financial statements. Sanctions that already existed are now being applied more strictly.

Within the “undertaking” mechanism of Method 1, a dishonest market access undertaking may well become a ground for taking action against both the enterprise and the project at the ex post inspection stage.

Conclusion

Article 19.2 of the 2025 Investment Law and Article 72 of Decree No. 96/2026/ND-CP constitute a commendable step in administrative-procedure reform, helping foreign investors to be more proactive upon market entry and clearly reflecting the shift from ex ante to ex post control. However, this reform will realize its full effectiveness only once the accompanying gaps are filled: a set of criteria for appraising the market access undertaking; a reporting regime for the transitional period; the legal consequences of the 12-month time limit; and the resolution of legal gaps so as to ensure uniform implementation across localities.

List of legal documents reviewed

1. Law on Investment No. 143/2025/QH15 (effective from 1 March 2026, save for certain provisions on business investment conditions) – Article 8, Article 19, Article 28, Articles 44–49.
2. Law on Enterprises No. 59/2020/QH14, as amended and supplemented by Law No. 76/2025/QH15.
3. Decree No. 96/2026/ND-CP detailing and guiding the implementation of a number of articles of the Law on Investment (Article 72; Appendix I; Appendix II).
4. Decree No. 168/2025/ND-CP dated 30 June 2025 on enterprise registration, as amended and supplemented by Decree No. 296/2026/ND-CP dated 23 July 2026 (effective from 23 July 2026).
5. Decree No. 296/2026/ND-CP dated 23 July 2026 amending and supplementing a number of articles of Decree No. 168/2025/ND-CP on enterprise registration (notably: Article 4.7 – dispensing with submission of a copy of the Investment Registration Certificate and the written approval in respect of foreign investors; Article 24.6 – enterprise registration dossier accompanied by a market access undertaking; Articles 17 and 18 – beneficial owners of the enterprise).
6. Decree No. 19/2026/ND-CP on investment monitoring and evaluation (Article 97 on the handling of violations).
7. Decree No. 122/2021/ND-CP on the sanctioning of administrative violations in the field of planning and investment (currently under consideration for amendment and replacement).
8. Circular No. 44/2026/TT-BTC on the system of forms for investment monitoring and evaluation reports and the online reporting regime.
9. Circular No. 06/2019/TT-NHNN on foreign exchange management of foreign direct investment activities in Vietnam, as amended and supplemented by Circular No. 03/2025/TT-NHNN (Article 3 on the entities eligible to open direct investment capital accounts; Article 4 on capital contribution; Article 8 on investment preparation activities).
10. Decision No. 27/2018/QD-TTg promulgating the Vietnam Standard Industrial Classification.
11. Official Letter No. 5427/BTC-DNTN dated 29 April 2026 of the Ministry of Finance on the establishment registration of economic organizations by foreign investors.